I’ve attempted to write a case study which might be of interest to all.
Everyone is invited to share their views and experiences. If the
experiment goes ok more to come.

All
situation and characters are fictitious. Usual disclaimers apply. This
case is written purely for academic discussion and should not be taken
in any other sense.

Case Study 1:

XYZ Corporation limited has
floated an open tender for an Earning Contract. Bids have been called
on the basis of absolute amount as quoted in tender document. Contract
will be allotted to the highest bidder provided he/she fulfills other
Eligibility Criterion. For details in discussion let us assume the
Reserve Price is Rs 100000 per unit basis.

Three bids were
received on the date of opening of tender. Let’s name the bidders B1,
B2 and B3. The bids received were Rs 110000, Rs 105000 and Rs 110000
respectively. On analysis it was found that both the bidders B1 and B3
are fulfilling all the Eligibility Criterion.

The decision
making authority, let’s call him D1, is in confusion whom and how to
decide the allotment. As the tender cannot be divided, D1 could think
of two alternatives.

a. Flip a coin.
b. Call a negotiation with both of them together and offer the contract to the higher bidder.

D1
thinks that flipping the coin is an easier option. Both B1 and B3 are
fulfilling the Eligibility Criterion and their bids are 10% more than
the reserve price. On second thoughts D1 found there is still scope for
increasing the revenue. Just do joint negotiation and ‘animal spirit’
will take care of the rest. XYZ Corp has no clear guidelines on joint
negotiation or second round of biddiing.

What course of action
should D1 resort to? Will the course of action alter depending on risk
taking aptitude of D1? Which other factors might influence the
decision?